Takeda plans 10% reduction in workforce, earnings set to fall

Takeda Pharmaceutical Co is reportedly cutting up to 1,900 jobs and predicting a couple of tough years ahead earnings-wise as it tries to cope with generic competiton to key products.

The Osaka-headquartered company has around 19,600 employees, and some 10,300 of those work outside Japan. The USA, where Takeda has around 5,000 employees will take the brunt of the cuts and 28% of the 1,300 employees at its North American headquarters in Deerfield, Illinois will go. Cuts of around 20% will also be made at Takeda Global R&D Centre in Lake Forest, also in Illinois, which employs 840 people.

The reductions were announced as Takeda posted a major rise in earnings for the fiscal year ending March 31 but lower sales. Net income rose 27% to 297.70 billion yen, about $3.22 billon, although sales fell 4.7% to 1.466 trillion yen. The decline was due to the strength of the yen and the loss of patent protection in the USA on the gastrointestinal drug Prevacid/Takepron (lansoprazole). Sales of the latter fell 19.6% to 218.10 billion yen.

Takeda added that sales increased in the USA for Velcade (bortezomib), for the treatment of patients with multiple myeloma and mantle cell lymphoma. The newly-launched gout drug Uloric (febuxostat) and Dexilant Kapidex (dexlansoprazole), a reformulated version of Prevacid, also contributed to growth.

The company also announced a 2010-2012 “mid-range plan” as the pharmaceutical industry deals with “barriers to technological innovation that have halted progress in breakthrough novels drugs, stricter approval processes for new drugs in advanced nations and radical upheaval in healthcare systems”. This will involve improving R&D productivity, and concentrating on its core therapeutic areas - obesity, diabetes, atherosclerosis, cancer, depression, schizophrenia, and Alzheimer's disease.

Takeda has also predicted that earnings will fall in the next two fiscal years. For the 12 months ending March 2011, it expects a 26% decline in net profit to 220 billion yen, falling a year later to 200 billion yen, as generic competition to Actos in the USA begins.